Credit Suisse has moved to withdraw three key proposals to the 2023 annual general meeting (AGM) of shareholders as it prepares for a AU$4.8 billion all-share acquisition by UBS.
The proposals, first announced on 14 March, include discharging the members of the board of directors and executive board for the 2022 financial year (Item 2).
“Due to the unprecedented circumstances concerning the bank in recent weeks and which resulted in the planned merger between Credit Suisse and UBS, the board decided to withdraw its proposal to this agenda item, which renders this agenda item and the vote thereon obsolete,” Credit Suisse noted in a statement.
The bank has also withdrawn a one-time deferred share-based transformation award (Item 8.2.2) for its executive board, which was linked to the implementation of Credit Suisse’s strategic objectives.
Moreover, as per the conditions of liquidity assistance extended to Credit Suisse by Swiss regulators, the bank is not permitted to resolve on and distribute a dividend for the 2022 financial year.
As such, Credit Suisse is set to withhold a dividend of CHF 0.05 (AU$0.08) per share.
The Swiss Federal Department of Finance (FDF), the Swiss Financial Market Supervisory Authority (FINMA), and the Swiss National Bank (SNB) offered their full support for UBS’ acquisition of Credit Suisse earlier this month.
Credit Suisse shareholders have been offered one UBS share for every 22.48 Credit Suisse shares, representing approximately CHF 0.76 (AU$1.22) per share for a total consideration of CHF 3 billion (AU$4.8 billion).
The deal is not subject to shareholder approval, with UBS securing a pre-agreement from Swiss regulators to accelerate the acquisition.
Once finalised, the acquisition would involve “managing down” Credit Suisse’s investment bank while reinforcing UBS’ global investment strategy, with the combined investment business to account for approximately 25 per cent of group risk-weighted assets.
Together, the businesses are tipped to manage over AU$5 trillion in invested assets across global markets, of which, approximately AU$2.2 trillion would be invested in Europe.
The combined business is projected to generate an annual run-rate of cost reductions exceeding AU$11.9 billion by 2027.
The takeover came amid ongoing concerns over the strength of Credit Suisse’s balance sheet, which was undermined by “significantly higher withdrawals” of cash deposits and non-renewal of maturing time deposits over the fourth quarter of 2022.
Investor sentiment later worsened off the back of three banking collapses in the United States, attributed to poor capital management exposed by aggressive monetary policy tightening.
The withdrawal of Credit Suisse’s AGM proposals coincided with the appointment of a new UBS chief executive officer. Sergio Ermotti has been named as group CEO and president of the group executive board, effective from 5 April.
Mr Ermotti, who is currently chairman of Swiss Re, served as CEO of the Swiss banking giant for nine years before being succeeded by current CEO Ralph Hamers in November 2020.
Mr Hamers is expected to remain at UBS and work alongside Mr Ermotti as an adviser during a transition period.
